Accurately determining demand forecasts for products is a paramount concern for retail organizations. Demand forecasts are used for inventory control, purchase planning, work force planning, and other planning needs of organizations. Inaccurate demand forecasts can result in shortages of inventory that are needed to meet current demand, which can result in lost sales and revenues for the organizations. Conversely, inventory that exceeds a current demand can adversely impact the profits of an organization. Excessive inventory of perishable goods may lead to a loss for those goods, and heavy discounting of end of season products can cut into gross margins.
Demand Chain Management (DCM) refers to a suite of analytical applications for retail business, that provides retailers with the tools they need for product demand forecasting, planning and replenishment. DCM assists retailers in accurately forecasting product sales at the store/SKU (Stock Keeping Unit) level to ensure high customer service levels are met, and inventory stock at the store level is optimized and automatically replenished.